Estate duty is payable on all property passing on death or deemed to pass on death, of a deceased person except where such person is a child, who had acquired property by gift from his parents, passes to his surviving parents. In the case of a deceased person domiciled in Cyprus the whole property, wherever situated, is taxable, whereas in the case of a deceased person not domiciled in Cyprus only property situated in Cyprus is taxable. Gifts made within three years of the death are also taxable.

Property acquired in Cyprus after January, 1976 from remittances from abroad is exempt where the deceased had his domicile in Cyprus at the time of his death and was at any time before his death permanently residing outside Cyprus. Any property held by the deceased as trustee is not taxable.

Property includes movables and immovables of every kind, including money or investments. In the case of a deceased person who was not domiciled in Cyprus, the following will be excluded:

  • shares in a company owning a Cyprus ship
  • shares in a Cyprus offshore company
  • bank deposits in Cyprus, whether with an onshore or offshore bank.

In arriving at the amount chargeable to estate duty certain expenses, including the following, are deductible:

  • debts
  • taxes
  • donations to charitable institutions up to C£50.000
  • donations to the Government or local authority for public purposes
  • reasonable funeral expenses.

The following allowances are also deductible:

  • for a surviving spouse C£75.000
  • for each surviving child under 21 years of age C£150.000
  • for each surviving child of any age who is physically or mentally handicapped C£150.000
  • for each surviving child of 21 years of age or over C£75.000
  • for each surviving child under 21 years of age of each predeceased child C£150.000
  • for each surviving child over 21 years of age of each predeceased child C£75.000
  • donations to approved charities up to C£50.000
  • gifts to the Government - Unlimited
Exemption - Immovable property of the deceased up to the total value of £150,000 which immediately before his death was exclusively used for residence by him or his family.
The tax rates of estate duty are progressive as follows:
                          C£                         Tax rate
                                                         %

The first               20.000                          nil
The next                 5.000                          10
The next                10.000                          13
The next                20.000                          15
The next                25.000                          17
The next                25.000                          20
The next                45.000                          23
Any balance                                             30

The estate duty may be reduced by "quick succession relief", and also by the deduction of foreign estate duty on property held abroad. Duty not paid carries interest at 9% p.a. after the expiration of one year from the date of death.

NB. The abolishing of the Estate Duty Law as from 1 April 1997 has been withdrawn.

This information was correct as of 12 February 1997.

The contents of this article are intended to provide a general guide to the subject matter. Specialist advice should be obtained before any action is taken.